Defendants Allegedly Solicited Customers to Purchase Their
Advisory Services Using False Claims; Nexgen and Novak also
Failed to Register as Commodity Trading Advisors

WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission
(CFTC) announced today the filing of a federal court action
against defendants Nexgen Software Systems, Inc. (Nexgen)
and John P. Novak, both of The Woodlands, Texas, alleging
that Nexgen, through Novak, used fraudulent and misleading
representations to solicit members of the general public to
direct the trading in their commodity interest accounts. The
complaint further alleges that Nexgen failed to register with the
CFTC as a commodity trading advisor (CTA).

According to the complaint,
Novak fraudulently solicited
customers by falsely representing that both he and his customers
were trading profitably using the Nexgen service. In reality, the
complaint alleges, neither Novak nor any of his customers ever
profited using the service.

The complaint further charges that Nexgen held itself out to the
public as a CTA and directed the trading of more than 15 client
accounts, and thus should have been registered as a CTA with the
CFTC. In addition, Nexgen allegedly failed to provide disclosure
documents to clients as required by the Commission’s
regulations.
The complaint seeks permanent injunctive relief, restitution, and
civil penalties.

The following CFTC Division of Enforcement staff members are
responsible for this case: Lael Campbell, Christine Ryall, John
Dunfee, Paul Hayeck, and Joan Manley.